Higher basidiomycetes, commonly referred to as mushrooms, have been used for centuries in traditional medicine and are known to synthesize an array of biologically active natural products. It is thought that mushrooms are among the greatest unexplored resources for the discovery of novel biologically active compounds. Despite the extremely rich chemodiversity of higher basidiomycetes and the prospects for the discovery of new drugs, mushrooms have only recently caught the attention of medicinal chemists and biochemists. Mushrooms are known to produce a variety of sesquiterpenes with unique skeletons not found in microbes or plants. One class of sesquiterpenoids, the illudanes, has received considerable attention because of their potent antitumor and antibacterial activity. Illudins M and S produced by the Jack O'Lantern mushroom Omphalotus olearius exhibit cytotoxic and cytostatic properties at nanomolar concentrations in several human tumor cell lines, including multiple drug resistant tumors. Semi-synthetic illudin analogues irofulvene and acylfulvene with improved therapeutic indexes and remarkable antitumor activities have been synthesized and are currently under investigation in several phase I and II trials against several solid tumor types. The biosynthesis, however, of this class of illudane sesquiterpenoids is not known. The proposed research will be the first biosynthetic investigation of this important and unique class higher fungal sesquiterpene natural products. The specific hypotheses of this proposal are that: (1) Illudins are derived via a protoilludane skeleton synthesized by a new type of cyclase and (2) installment of the reactive cyclopropane ring in illudins occurs after the initial cyclization reaction presumably via a P450 monooxygenase catalyzed reaction. It is proposed to (1) identify and characterize the cyclase responsible for formation of the protoilludane scaffold, (2) identify and characterize additional illudin biosynthetic genes and (3) probe the substrate range of protoilludane scaffold modifying enzymes. The long-term goal of this research is to investigate biosynthesis of different protoilludane-type sesquiterpenoids in higher fungi with the goal of using the identified biosynthetic enzymes to explore synthesis of new functionalized sesquiterpenoids with potent antitumor properties and improved therapeutic properties. It is thought that mushrooms are among the greatest unexplored resources for the discovery of novel biologically active compounds;but despite the extremely rich chemodiversity of higher basidiomycetes and the prospects for the discovery of new drugs, mushrooms have only recently caught the attention of medicinal chemists and biochemists. One class of sesquiterpenoids, the illudanes, produced by the Jack O'Lantern mushroom Omphalotus olearius exhibit potent cytotoxic and cytostatic properties in several human tumor cell lines, including multiple drug resistant tumors. The goal of this research is to investigate biosynthesis of illudane sesquiterpenoids in mushrooms with the goal of using the identified biosynthetic enzymes to explore synthesis of new sesquiterpenoid structures with potent antitumor properties and improved therapeutic properties.